Purchasing departments in chemical companies face increasingly complex challenges in procuring raw materials. While it is important to ensure that the chemicals being bought meet quality norms and are priced competitively, it is also essential to meet all the applicable regulatory requirements.
Large chemical companies have elaborately designed supply chains that are capable of meeting fluctuations in demand for raw materials. They have several suppliers for each of their requirements.
Chemical buyers often have to perform a careful balancing act in the process of meeting conflicting priorities. Every purchase needs to be made at the lowest possible cost and from the most dependable supplier.
The availability of reasonably priced chemicals that meet stipulated quality standards is critical to the success of manufacturing companies. High-quality raw materials will lead to the production of high-quality end-products. Conversely, if compromises are made at the procurement stage, the results can include customer dissatisfaction and lost orders.
When an organization is on the lookout for a new chemical supplier, it is essential that it first verifies that the company meets regulatory requirements. In fact, it is important to carry out this check even for purchases from existing sources because of frequent changes in the applicable rules and regulations.
Chemical procurement is becoming increasingly complex with multiple sources being available for each material, a wide variation in quality, and the inability of purchasing companies to conclusively determine the credentials of a new supplier before an order is actually placed. If companies can simplify their purchasing processes, there are tremendous gains to be made.
Identifying the chemical suppliers that can deliver the greatest value to your organization is a challenging task. Long-term agreements for bulk purchases can get you the best rates. But commitments of this type often tie you down and prevent you from taking advantage of changing market conditions.
The success of a manufacturing process is often dependent upon the quality of the chemicals that are used. Purchasing departments face the challenge of buying raw materials that meet required specifications and are priced within the stipulated budget. In many instances, it is not possible to satisfy both these requirements. Consequently, a choice has to be made between one and the other.
The volume of chemicals required by an organization often fluctuates. During certain periods, consumption may follow a steady pattern. At times like this, it is a relatively simple task to ensure that adequate supplies are at hand.
The purchasing department in a manufacturing organization that requires a steady supply of various chemicals, fulfills its role by playing a delicate balancing act.